I was trained in finance, tested in private aviation sales, and was a part of Gowalla being acquired by Facebook and Waze being acquired by Google. I now am the President and Chief Revenue Officer of StockUp, the company building the shopping list that tells you where to shop.
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The $98,000,000 Contract Inked on an iPad

There are few things that create as much of a buzz kill in 2012 as the phrase, “What’s your fax number?” The hassle that follows that question is so last century.

Early this Wednesday morning, point guard Deron Williamstweeted a photo of himself signing a 5 year $98,000,000 contract to rejoin the Brooklyn Nets. The signing took place in Las Vegas where Mr. Williams is at training camp for TEAM USA basketball ahead of this year’s Olympic Games in London. But the contract is not being signed with a fancy Mont Blanc pen, but with his finger on an iPad.

The app being used is called SignNow, a company based in Newport, CA that recently raised $2,000,000 in venture funding. ”We are seeing a trend that endorsement deals and contracts are increasingly being signed using iPads and mobile devices. The key to the shift has been making signatures look great while being more secure than pen and ink,” said Andrew Ellis, President of SignNow. ”To our knowledge, this is the largest contract signed to date [using SignNow]. We’ve had over half a million documents signed since launching in early 2012.”

Thinking I may have just solved my ‘can you email, print, sign, scan, and email the contract back to me’ time suck dilemma, I checked it out. Besides making my signature look better than normal, the app was easy to use and intuitive to the normal flow of contracts. And no trees were killed in the process.

But, before I got to far down the road on this idea revolutionizing my own deal closing-contract signing process, I checked in with Kyle Carlton, an attorney based in Dallas, TX. “While it may be ‘legal’ for Mr. Williams to sign a digital copy, if he was my client, I would still have strongly advised signing a paper copy to remove any opportunity for gray area disputes in the future. Especially on a contract of this size.”

The fact that this contract is with a New York based organization and was signed in Nevada also gave Mr. Carlton pause. ”The laws are frustratingly behind the times in the area of digital signatures because the states can’t agree on a uniform body of laws and procedures. This become particularly troublesome when you dig into what constituents ‘presence’, witnesses, and signing.”

While I have no plans on being the one to let Jay-Z and his Brooklyn Nets know that they may need to have a more formal ink to paper contract signing session with Mr. Williams, I do look forward to spending less time shuffling papers through the load tray of a fax machine and more time perfecting my digital signature.

To share your best contract signing war stories and thoughts around the art and science of hustle, follow along with the conversation on Twitter: @andyellwood

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Exciting article, however Mr. Carlson’s lack of knowledge in the space was both factually incorrect and enormously ignorant of the last century of electronic signature law and court proceedings. E-Signing is 100%-rock-solid-no-questions-asked legal. They are used on enormous contracts, including by most of the Fortune 500. This is large, but we know of many multi-million dollar contracts signed on our platform alone.

There has never been a document thrown out of court because it was electronic. Ever. Extending to the days when agreements were made over telegraph. Despite this fact, in order to ensure that there would be no confusion ever again, the states passed laws based off the UETA (Uniform Electronic Transmissions Act) in 1999. The federal government passed the ESIGN act to further solidify this in 2000.

AEllis – I don’t dispute the fact that digital contracts are used by Fortune 500 companies and that they are rarely thrown out of court. Indeed, even our firm uses electronic signatures for various items in our practice. Since you are the president of SignNow, I know that you have researched these matters intensely for your clients. When Andy contacted me about this article featuring you I looked at your product. We may switch to it.

That said, I do advise caution in any area of the law that is relatively new. An attorney’s job is to provide as much certainty as possible to their client. All new areas of the law have inherent uncertainty. For example, several states have not enacted UETA. Even more states have amended or “tweaked” various portions before passage. UETA also has various conflicts and inconsistencies with the Federal ESIGN Act. In an international context, it becomes even more problematic. If there weren’t areas of uncertainty, then law schools wouldn’t be teaching classes on electronic signatures (featuring hundreds of cases).

Most importantly though, simply enacting law does not render certainty. That is merely the starting point. It takes years for the court system to sort out how to INTERPRET those laws. Only then do you have certainty. The UETA was first proposed in 1999 and most states didn’t enact it until the mid 2000’s. That makes it a relative newborn in terms of laws.

This is even more problematic with the ancillary aspects of signatures – for example, when documents need to be witnessed and/or notarized. Many states do not allow digital witnessing yet. And certain states have exempted entire bodies of law from digital signatures (for example their probate code).

All that to say that the average person signing contracts on the fly may not be aware of these intricacies and may expose themselves to legal risk or uncertainty as a function of such. Digital signatures CAN add uncertainty.

When the LLC became popular 25 years ago, it was prudent to caution clients because they were so new. No one knew how the courts would rule on the gray areas. We now use them regularly because the courts have ruled. Digital signatures are the next new area.

My advice is not that electronic signatures should be avoided. Adoption is the only way we will establish certainty. And, like I said, we use them in some aspects of our practice. I simply advise caution.

I can foresee a day when electronic contracts provide MORE certainty than a hand signature. In fact, I look forward to that day.